2. Inventories
• Expendable commodities acquired or ordered
for immediate use in connection with
government operations
• Not restricted to items normally consumed
within one year after being put into use
3. Asset Method/ Perpetual Inventory
Method
• Asset Method- will be followed in recording
disbursements when expenditures apply to more
than just the accounting period
• Perpetual Inventory Method- the moving
average unit cost is used which provides a new
unit cost after each purchase and/or when items
are issued/used.
4. • Asset Method
Examples of Disbursements
oInsurance
oInterest
oRent
- The expense shall be recorded upon
utilization/consumption
- When insurance, interest, rent, etc., will be fully
used up/ consumed within the current accounting
period, the disbursement shall be taken up as
expense
5. • Perpetual Inventory Method
▫ Purchases of supplies and material stock,
regardless of whether or not they are consumed
within the accounting period shall be recorded
using the inventory account
6. • Under COA Circular No. 2005-002 dated April
14, 2005 (Appendix 10), COA prescribed the
accounting policy that small tangible items with
estimated useful life of more than one year shall
be recorded as inventories upon acquisition and
as expense upon issuance.
7. General Guidelines in Procurement
• Agencies shall procure common-use supplies,
materials and equipment from the Procurement
Service
• Procurement of supplies, materials and
equipment shall be through competitive public
bidding
8. • Appropriated funds shall be available for locally
manufactured goods, provided:
▫ Importation may be made when none of the
desired quality or standard is available in the
market
▫ When the price of the local product or service is
more than fifteen percent (15%) of that of a similar
product offered by an enterprise other than
domestic entity pursuant to Section 4 of the Fag
Law
9. General Procedures in Procurement
• Procurement of Planning and Preparation of the
Annual Procurement Plan (APP)
• Requisitioning or Preparation of Supplies
Availability Inquiry (SAI)
• Approval of Requisition
• Preparation of Obligation Slip (OS)
• Preparation, Approval and delivery of Purchase
Order Letter Order/ Contract
• Delivery, Inspection and Acceptance of the items
• Payment for the Items delivered.
10. Procurement Planning and Preparation
of the APP
• All procurement should be:
▫ Within the approved budget
▫ Meticulously and judiciously planned
▫ In accordance with an approved Annual
Procurement Plan
11. • Each procuring entity shall do the following:
▫ Judiciously prepare the APP
▫ Maintain and update APP for all its procurement
▫ Include each individual project, a Project
Procurement Management Plan (PMPP)
12. • The PMPP shall include:
▫ The type of contract to be employed
▫ The extent size of contract scopes/ packages
▫ The procurement methods to be adopted and
indicating if the procurement tasks are to be
outsourced
▫ The time schedule for each procurement activity
▫ The estimated budget for the general components
of the contract
▫ Development of the manuscript
▫ Printing of the textbooks
13. • Responsibilities
▫ Preparation and updating of the PPMPs – Project
Management offices or end-user units of the
procuring entities
▫ Consolidation of PPMPs into an APP – BAC
Secretariat of procuring entity
14. Requisitioning
• The art of requiring that something be furnished
• In the procurement function, it is the
submission of written requests for supplies,
materials and the like.
15. • Under the NGAS, the request for inventory items
is made through any mode of determining
availability of supplies and other inventory items
pursuant to GAFMIS Circular letter no. 2003-
006 dated November 24, 2003
▫ The specifications and descriptions of the supplies
and property called for in the requisition shall
include only the technical specifications, which
will fill and satisfy the needs of the requisitioner
▫ All measurements and weights shall be stated in
the metric system except those supply or property,
which can be better described in the English
System.
16. Specification
• The heart of any contract for the supply of goods
or services since they describe the supplies to be
delivered and the services to be rendered
17. Types of Specifications
• Performance Specifications
▫ Performance characteristics desired for the item
• Design Specifications
▫ Precise measurements, tolerances, materials in
process and finished product tests, quality control,
inspection requirements
• Purchase Descriptions
▫ Should always allow for competition
18. Requirements for Requisition
• Agencies may be allowed to enter into contracts
for the purchase of supplies and materials for
one year subject to the condition that deliveries
shall be made on a staggered basis and the
agencies 3 months supply requirements are not
exceeded and payments shall be made after each
delivery only.
• Requisitions of drugs and medicines should
comply with the Generics Act of 1988 (RA 6675)
19. Approval of Requisition
• Head of office or department within a
reasonable time approves requisitions after its
submission
20. Preparation of Obligation Slip
• Prepared showing the certification of the Head
of Accounting Unit/ Authorized Official as to the
correctness and validity of obligations, and
availability of funds
21. Preparation, Approval and Delivery of
Purchase Order/ Letter Order/
Contract
• The PO/ LO/ Contract is the document
evidencing a transaction for the purchase of
supplies and materials, usually prepared by the
Supply Officer or his/ her equivalent
22. • It shall include:
▫ Office to which account shall be charged
▫ Requisition number
▫ Name and address of the contractor/ supplier
▫ Office from which payment shall be collected
▫ Complete description and specifications of the
supplies
23. ▫ Other information and data needed to enable
agency officials and all others concerned to
determine:
Nature, quality of the items purchased
Quantity and unit price of the items
Period of delivery
Shipping items and directions and other conditions
of the delivery
Provisions on penalties for late or no delivery
Condition regarding importation, if any
Date of effectivity and termination of contract
24. PO is prepared after the decision on the mode of
procurement has been made and the conditions
pertaining thereto have been met
25. Approval of PO/ LO/ Contract
Contracts Awarded Thru Public
Bidding
Full authority to Heads of Procuring
entities to enter into contracts and/ or
give final approval
Heads of Procuring entity may
delegate in writing this full authority
Contracts Entered Into Thru
Alternative Modes
For contracts involving P300 million,
Head of the entity shall have full
authority after obtaining:
o opinion of the Justice Secretary that
contract falls within the exceptions to
public bidding
o approval from NEDA Director-
General or any authorized approving
officials
Contracts below P300 million: Full
authority to Head of procuring entity
26. Delivery of PO/ LO/ Contract
• Delivered by the agency personnel concerned to
the contractor/ supplier within a reasonable
time after its approval
28. General procedures in Conducting
Inspection
• Upon receipt of the request for inspection, check
the following documents as to completeness and
authenticity:
▫ PO/ LO/ Contract or their equivalent
▫ Supplier’s Invoice/ Delivery Receipt
▫ Other required papers necessary for a substantive
inspection
29. • Proceed to delivery site and conduct inspection
and testing procedures if applicable
• If delivery is subject to test and samples are
taken, accomplish the certificate of sampling in
accordance with the prescribed guidelines on
testing
• Prepare inspection report immediately after
inspection for submission to the agency
inspector’s supervisor
30. Acceptance or Rejection of Delivery
• Rejection or Reduction in Price
▫ Shortage in quantity
▫ Deficiencies/ defects in quality
31. • After consideration of tolerable allowance, the
following standards shall be observed by the
inspector in the evaluation of the result of the
inspection of supplies an property:
▫ In accordance with the required specifications are
accepted
▫ Quality analysis shows a deficiency of less than 10
% are accepted
▫ Quantity is short by volume, weight, actual count,
etc. shall be subject to reduction in contract price.
32. Basic Requirements in the Payment of
Supplies and Materials
• Original copy of the dealer’s invoice
• Indication of acceptance by a duly authorized
official/ employee on the invoice
• Requisition for equipment or supplies approved
by the agency head
33. • Purchase order issued by the agency supported
with:
▫ Documentary evidence of public bidding
▫ Canvas from at least 3 bonafide dealers
▫ If procurement was from a sole distributor, duly
notarized certificate of exclusive distributorship of
the dealer/supplier
• Acknowledgement Receipt for Equipment
34. • Where the supplies and materials delivered are
subject to test, the claim should be supported by
the evidence of the sampling made by the
Technical Inspector
35. Documentary Requirements
• Purchase Request
• Purchase Order/Letter Order/Contract
• Original copy of the dealer’s/suppliers invoice
• Acceptance and Inspection Report
• Result of test/analysis by proper government
agency if articles are subject to test
36. MODES OF PROCUREMENT
• Section 10 of RA 9184 provides that all
procurement shall be done through competitive
bidding except as provided for in article XVI.
37. • Article XVI provides for the alternative methods
of procurement which are:
▫ Limited source bidding
▫ Direct contracting
▫ Repeat order
▫ Shopping
▫ Negotiated procurement
38. Limited Source Bidding
• Known as selective bidding
• Involves direct invitation to bid by the
concerned procuring entity from a set of pre-selected
suppliers or consultants
39. • Pre-selected suppliers or consultants
▫ Shall be those appearing in a list maintained by
the relevant Government authority
▫ Has expertise in the type of procurement
concerned
40. Direct Contracting
• Does not require elaborate bidding documents
• The supplier is simply asked to submit a price
quotation or a pro-forma invoice together with
the conditions of sale
41. Repeat Order
• Method of procurement of goods from the
previous winning bidder, whenever there is a
need to replenish goods procured under a
contract previously awarded through
Competitive Bidding.
42. REQUISITES
• A. Unit Price = < original contract price
• B. The repeat order does not result in splitting of
requisitions of purchase price;
• C. Available only within 6 months from the date
of the NOTICE TO PROCEED
• D. It shall not exceed 25% of the qty. of the
original contract.
43. Shopping
• Procuring entity simply requests for the
submission of price quotations for readily
available off-the-shelf goods or ordinary/regular
equipment to be procured directly from
suppliers of known qualifications
45. Negotiated Procurement
• Method of procurement of goods, infrastructure
projects an consulting services, whereby the
procuring directly negotiates a contract with a
technically, legally and financially capable
supplier, contractor or consultant
46. When is Negotiated Procurement
Occur?
• Section 53. Failure of Bidding.
• A. No bids received
• B. No bid qualifies as the lowest calculated
responsive bid or highest rated responsive bid;
• C. Refusal to accept the award of contract.
47. Other Activities After Procurement
• Property Records to be Maintained
▫ Property Officer- maintain Stock Cards per stock
number
▫ Stock Cards- all receipts and issues of supplies and
the balance on hand are recorded currently on this
card
48. • Recording of Deliveries of Supplies or Property
in the Books of Accounts
• Chief Accountant- shall maintain Supplies Ledger
Card per stock number, PPE Ledger Card for each
category of assets and Real Property Ledger Card for
land
• Report of Supplies and Materials Issued
49. • Supplies Ledger Card- shall be kept for each type
of supply to record all acquisitions, issues and
disposals.
• Equipment Ledger Card- shall be kept for each
class of equipment to record the acquisition,
description, custody, estimated life,
depreciation, disposal and other information
about the equipment, based on the source
documents of the transactions
50. Measure of Liability of Persons
Accountable for Supplies or Property
• Liable for its money value in case of illegal,
improper or unauthorized use or misapplication
• Liable for all losses, damage or deterioration
occasioned by negligence in the keeping or use of
property
51. Note;
• Unless he registered his obligation in writing
under the direction of a superior in using
supplies or property with which is chargeable.
52. Return of Equipment Issued
• When the equipment issued to an officer or
employee is no longer needed by him, said
equipment shall be returned to the Property
Officer (PO)
• PO shall cancel the original Acknowledgement
Receipt for Equipment (ARE)
• Return of the equipment shall be posted by the
Property Custodian in the equipment card
• A new ARE shall be accomplished and issued to
the new user of the equipment
53. Return of Unused Supplies and Scrap
Materials
• Shall be returned to the Property Custodian
• Property Custodian shall acknowledge thereof
on the RIS indicating thereon “Returned to stock
• Return Receipt- shall contain the complete
description of the returned Property
• Scrap Materials which may still be used in the
future shall be returned to the Property Officer
54. Property Clearance
• Whenever an officer or employee of the
government shall be transferred to another
government office, retired, resigned, dismissed,
or separated from the service, he shall secure
clearance from property accountability
